Water and Wastewater Utility Rates - Workshop 1...Wastewater Solar Project $2,398,711 $173,000...

Water and Wastewater Utility Rates -

Workshop 1

January 12, 2016

Presented By: Diana Langley

Public Works Director

1

Workshop Agenda

• Workshop 1 – January 12

– Water and Wastewater Operational Needs

– Condition of Water and Wastewater Systems

– Major Capital Improvements Required

• Workshop 2 – February 9

– Presentation of Proposed Rates

– Review of Proposition 218 Process

2

Enterprise Operations

3

Operating Cost

Debt Service

Capital Investment

= Revenue Requirement

Enterprise Operations - Water

4

= Revenue Received Operating

Revenues

Capital Revenues

Operating Revenues = Water Sales, Backflow Prevention Fees, Interest on Investments Capital Revenues = Extension Fees, Connection Fees, HWS Surcharge, Interest on Investments

Enterprise Operations –

Wastewater

5

= Revenue Received

Operating Revenues

Capital Revenues

Operating Revenues – Wastewater Service Charges, Septage Fees, Lab Fees, Pretreatment Permits, Interest on Investments Capital Revenues – Extension Fees, Connection Fees, Interest on Investments

Funding Allocation Over Time

6

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20

An

nu

al

Ob

lig

ati

on

s

Fiscal Year

Water Revenue Requirements vs. Revenue Under Existing Rates

Reserve Funded Capital Expenses

Rate Funded Capital Expenses

Debt Service

O&M Expenses

Revenues under Existing Rates

Anticipated Revenues under 2011Approved Rates

Funding Allocation Over Time

7

$0

$2,500,000

$5,000,000

$7,500,000

$10,000,000

$12,500,000

$15,000,000

$17,500,000

$20,000,000

$22,500,000

10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20

An

nu

al

Ob

lig

ati

on

s

Fiscal Year

Wastewater Revenue Requirements vs. Revenue Under Existing Rates

Reserve Funded Capital Expenses

Rate Funded Capital Expenses

Debt Service

O&M Expenses

Revenues under Existing Rates

Anticipated Revenues under 2011Approved Rates

Operating Costs - Water

8

$-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

10/11 11/12 12/13 13/14 14/15 B15/16

Fiscal Year

Water Operating Costs

Operating Costs = Salaries & Benefits + Materials, Services, & Supplies

Operating Costs - Wastewater

9

$-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

$10,000,000

10/11 11/12 12/13 13/14 14/15 B15/16

Fiscal Year

Wastewater Operating Costs

Operating Costs = Salaries & Benefits + Materials, Services, & Supplies

Operating Costs

10

Fixed 58%

Variable 42%

Fixed 60%

Variable 40%

Water Wastewater

• Fixed Costs – Do not vary by volume treated • Examples: Raw water, staffing, maintenance, and repairs

• Variable Costs – Vary depending on volume treated • Examples: Power, utilities, and chemicals

Debt Service - Water

• Existing Debt Obligations

11

Title Amount Approximate Annual Payment

Water Revenue Refunding Bonds - 2013

$21,710,000 $1,391,000

Water SRF Loan – Region 1 $5,927,874 $378,500

Water SRF Loan – Region 2/3 $18,381,507 $1,150,000

Total: $2,920,000

Debt Service - Water

12

0.50

0.70

0.90

1.10

1.30

1.50

1.70

1.90

11/12 12/13 13/14 14/15 B15/16

De

bt

Co

vera

ge R

atio

Fiscal Year

Debt Service Coverage Ratio

Minimum Required

Debt Service - Wastewater

• Existing Debt Obligations

13

Title Amount Approximate Annual Payment

Wastewater Revenue Refunding Bonds – 2011

$9,715,000 $500,000

Wastewater Revenue Refunding Bonds – 2014

$7,321,914 $759,000

Wastewater SRF Loan – WWTF $3,500,000 $219,000

Wastewater SRF Loan – Collection

$7,193,965 $386,000

Wastewater Solar Project $2,398,711 $173,000

Total: $2,040,000

Debt Service - Wastewater

14

-

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

11/12 12/13 13/14 14/15 B15/16

De

bt

Co

vera

ge R

atio

Fiscal Year

Debt Service Coverage Ratio

Minimum Required

Capital Investment - Water

15

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

$20,000,000

05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 B15/16

Fiscal Year

Capital Improvement Program Expenditures

Capital Investment - Water

• Raw Water Intake & Fish Screen

• Low Lift Pump Station Security Improvements

• WTP Expansion to 36 MGD

• Hillcrest Conversion to Surface Water

• Water Line Replacement Project 2012

• Louise Avenue Water Line Replacement

16

Capital Investment –

Wastewater

17

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 B15/16

Fiscal Year

Capital Improvement Program Expenditures

Capital Investment –

Wastewater

• Downtown Collection System Rehabilitation &

Replacement

• Oxygen Reactors Improvements

• 12 kV Switchgear Improvements

• Emergency Wastewater Outfall Line

18

Water System Overview

• Water Treatment Plant

– Placed into operation 1969

– Expanded in 1999 – 24 MGD

– Expanded in 2007 – 36 MGD

– Current Permitted Capacity – 42 MGD

– Average Demands

Year Winter (MGD) Summer (MGD)

2011 8.5 20.7

2012 9.7 22.9

2013 9.0 21.0

2014 9.4 18.7

2015 8.6 15.0 19

Water Treatment Plant

Sludge Lagoons

Clearwells

Flocculation Basins

Sedimentation Tanks Media Filters

Operations Building

Pump Station

Membrane Filters

Solar Panels

20

Water System Overview

• Water Distribution System

– 265 Miles of Transmission and Distribution Mains

– Sizes Range From 3” to 36”

– 6 Storage Tanks

21

Water Infrastructure

Condition & Needs

• Water Treatment Plant

Project Estimated Cost Priority

Electrical & Instrumentation Improvements

Aquifer Storage Recovery/Second Well $4,600,000

Carbon Feed System Replacement $500,000

Backwash Recovery

Sedimentation/Floc Basin Rehabilitation

Fluoride System Replacement

Security Improvements $75,000

Groundwater Well Abandonments $400,000

Total:

22


Condition & Needs

23



Condition & Needs

24

Sedimentation/Floc Basin Rehabilitation


Condition & Needs

25

Fluoride System Replacement


Condition & Needs



Recoating Water Storage Reservoirs $400,000 Annual High

Replacement of Water Mains $27,400,000 High

Replace Water Services/Water Meters $700,000 Annual High

26


Condition & Needs


Sam Brannan Tank Harter Tank

27


Condition & Needs


28


Condition & Needs


29


Condition & Needs


30


Condition & Needs


31

Wastewater System Overview

• Wastewater Treatment Plant

– Placed into operation 1972

– Expanded in 2005

– Current Permitted Capacity – 10.5 MGD

– Current Average Flow – 6.5 MGD

– Solids Coming Into Facility – 11,000 lbs/day

32

Wastewater Treatment Facility

Secondary Clarifiers

Digesters

Primary Clarifiers

Headworks/BarScreens

Oxygen Reactors

Dewatering Building

Odor Control

Oxygen Generation

Operations

Lab Maintenance Shop

Disinfection Solar

33

Wastewater System Overview

• Wastewater Collection System

– 173 Miles of Sewer Mains

– Sizes Range From 6” to 42”

– 17 Sewer Lift Stations

34

Wastewater Infrastructure

Condition & Needs

• Wastewater Treatment Facility


Digester Improvements

Barscreen Rehabilitation/Replacement $1,200,000

Dewatering System Improvements $3,550,000

Electrical & Instrumentation Improvements $1,000,000

West Chlorine Contact Basin Rehabilitation $650,000

Secondary Clarifier No. 4 $5,500,000

New Outfall Diffuser $11,500,000

Secondary Clarifier Improvements $980,000

New Co-Generation System

35


Condition & Needs

• Wastewater Treatment Facility


Oxygen Generation Improvements

Grit Removal Facility $4,000,000

Disinfection System Evaluation & Replacement

$3,150,000

Advanced Treatment & Water Recycling Opportunities Evaluation

$270,000

New Septage Receiving Facility $1,650,000

Total:

36


Condition & Needs

Digester Lids

37


Condition & Needs

Barscreen Rehabilitation/ Replacement

38


Condition & Needs

Dewatering System Improvements

39


Condition & Needs


40


Condition & Needs

Rehabilitation of West Chlorine Contact Basin

41


Condition & Needs

Secondary Clarifier No. 4

42


Condition & Needs

New Outfall Diffuser

Existing Outfall Diffuser

43


Condition & Needs

New Outfall Diffuser

Existing Outfall Diffuser

Proposed Outfall

Diffuser Location

44


Condition & Needs



Replacement of Sewer Mains $33,000,000 High

Rehabilitation of Sewer Mains & Manholes

Lift Station Improvements $150,000 Annual High

45


Condition & Needs


Manhole Concrete Sewer Pipe

46


Condition & Needs


Concrete Sewer Pipe Concrete Sewer Pipe

47

Conclusion

• Need to recover revenues to meet operating and

debt service costs at a minimum

• Long-term need to collect sufficient revenues for

continued capital investment for rehabilitation

and replacement

48

Water and Wastewater Utility Rates - Workshop 1...Wastewater Solar Project $2,398,711 $173,000...

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Transcript of Water and Wastewater Utility Rates - Workshop 1...Wastewater Solar Project $2,398,711 $173,000...